Retailers Want In On The Pot Market

Recreational marijuana is about to become legal in Canada. How and where it will be sold, however, has been left up to provincial and municipal governments.

In Ontario, the LCBO seems like the most likely conduit, said Kurram Malik, a financial consultant at Jacob Capital Management Inc., pointing out that the provincial agency is already equipped to handle controlled substances.

“However, the LCBO will likely have to set up new retail outlets — you won’t see Cannabis in the liquor aisle,” he said, after Justin Trudeau’s Liberal government introduced legislation on Thursday that, if passed, would allow the sale of marijuana for recreational purposes beginning July 1, 2018.

Medical marijuana is currently available in Canada with a doctor’s prescription, using mail-order services. The legislation introduced Thursday fulfills a 2015 election campaign promise made by Trudeau that is believed to have driven young voters to the polls in support of the Liberal party.

Selling marijuana to people under the age of 18 will remain prohibited.

A spokesperson for the LCBO said it will take direction from the provincial government with regards to any role it may play when it comes to selling cannabis. “It is premature to speculate as to what that role may be, but we are paying close attention to the process as it unfolds,” said Christine Bujold.

What marijuana retailing will look like will really depend on the province, said Michael Gorenstein, CEO of cannabis firm Cronos Group. But he would like to see the product opened up for sale by as many channels as possible — as long as the channels meet security requirements for the safe distribution and sale, keeping it out of the hands of children.

“The more people that we allow to participate in the industry, the better it is overall for the economy, but also for the industry in the long term,” said Gorenstein